How to buy a property in Brazil
In order to buy a property in Brazil, some aspects need to be observed. If you are a foreigner person or organization, it’s important to note some restrictions apply to foreigners buying real estate property in Brazil.
Also, it is very important that you know the entire history of the property you are buying, as well as the debts and possible lawsuits of all the owners that the property may have had in the past five years.
The paragraph about may seem like an exaggeration, but always remember: when it comes to Brazil, it is not! Check out below why…
Before you buy a property in Brazil, investigate the lives of all previous owners in the past 5 years
You must know the debts and legal status of the previous owners in the last 5 years, because you may be buying the property from a person who is being targeted for a tax lien, foreclosure or labor execution. In Brazil, there is no mechanism that stops people from selling their assets before they are seized by the courts.
If you as a foreigner buy a property from someone who is the target of the above lawsuits, you will lose the property and your money, since the court recognizes such real estate transaction as non-existent. You can even try to sue the person who sold you the property, but it is very unlikely that you will be able to recover it.
The situation may seem absurd, but remember: in Brazil, many people avoid taxes and do not usually pay labor rights to their employees. They prefer to invest the money in the company and postpone those payments counting on their friendships with influential people. They do that until the political scenario changes and they get caught. And when they get caught, they start selling their assets, passing the damage to third parties who buy these assets in good faith.
Thus, a due diligence process checking the registry offices and courts across the country is very important before buying the property. CKSA offers this service. You can check out our Due Diligence Package here .
Looking for real estate property in Brazil? Don’t fall into traps!
Check out our Real Estate Due Diligence service .
What does a foreigner need?
Before buying a property in Brazil, it’s essencial to issue your own Brazilian Tax ID number. If you are an individual, you must issue a CPF. If you are an entity, you must issue a CNPJ. You can learn more about CPF here and about CNPJ here .